Emaar leads Dubai up; banks lift Abu Dhabi

STOCK WATCH: Egyptian investment bank EFG-Hermes raised its long-term rating to buy from accumulate. (Getty Images)

UAE shares led gains by most Gulf bourses on Wednesday as investors tracked a rally across global equity markets, anticipating oil to stabilise at about $50 and speculating ahead of dividend payouts.

"I expect this positive trend to continue on the back of a strong financial stock rally witnessed worldwide coupled with high oil prices above $46 and guidance about current year performance," said Sunil Dhall at Muscat-based Gulf Baader Capital Markets.

Gains in US stocks overnight after an unexpected jump in housing starts buoyed sentiment, while Asian stocks drifted higher on Wednesday.

A slump in oil prices has weighed on investor sentiment across the oil-exporting region and pushed down all seven regional equity markets this year as investors expect company profits to get pummelled.

Oil fell from a 2-1/2-month high towards $48 a barrel on Wednesday after industry data showed large builds in US crude stocks.

Abu Dhabi, the region's best performing market this year, made its biggest one-day gain since March 1 as bank stocks surged ahead of a raft of annual general meetings. First Gulf Bank, National Bank of Abu Dhabi Dhabi and Abu Dhabi Commercial Bank all rose more than 4.5 percent.

"The banks will soon hold AGMs and there is speculation on dividends," said Alfred Fayek, director in the GCC institutional desk team at EFG-Hermes.

Shares of Air Arabia climbed more than 2 percent after Egyptian investment bank EFG-Hermes raised its long-term rating to buy from accumulate, adding the budget airline was one of the best buying opportunities on the Dubai Financial Market.

The index snapped a two-day losing streak rising 1.17 percent paced by Emaar Properties despite Standard & Poor's downgrading the region's second largest property developer by market value to just two notches above junk grade on Tuesday.

"(The ratings) would have a negative affect, but it's difficult for it (Emaar) to go down much further," said Samer al-Jaouni, general manager at Middle East Financial Brokerage. "I'm pretty sure we have had most of the negative news priced in."

Kuwait's benchmark closed higher for the fourth time in the last five trading sessions as investors waited to see who will be appointed as the country's next Prime Minister following the cabinet's resignation on Monday.

Shares of Bank Muscat helped snap Tuesday's losses in Oman as investors were buoyed by a rally in global markets and buy stock ahead of forthcoming dividends.

"(Many investors) will be turning ex-dividend in the coming fortnight so they can earn the cash and the stock dividend is helping the markets to maintain a positive trend," said Gulf Baader's Dhall.

Saudi shares closed higher for the fourth time in five sessions led by Al-Rajhi Bank and Saudi Basic Industries Corp (SABIC).

Qatar National Bank helped lift Doha for the fourth consecutive session.

Bahrain's index was the only Gulf decliner on Wednesday, edging 0.15 percent lower to 1,572 points.

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